Relativity is reportedly trying to buy a major portion of MGM from its investors, including Highland Capital, the Carlyle Group and Sequoia Group and using that stake to force MGM into bankruptcy. Relativity would then streamline MGM's overhead and use the studio's distribution networks to release its films.

If Ryan Kavanaugh thought MGM was in such dire straits, why do business with the company now? Relativity also just inked a distribution deal with Lionsgate and is releasing the movies it co-finances through Sony and Universal. What would be left for the studio to release through MGM? Its Rogue titles, which are currently being distributed by Universal? Is MGM's distribution network better than Universal's? We doubt it.

We've reached out to Ryan Kavanaugh's PR rep, and we'll update this story as we get more information.

MGM is currently trying to restructure its $3.7 billion in debt after the studio's owners (Sony, Comcast, TPG Capital and Providence Equity Partners) grew concerned that the company's free cash flow of $500 million a year wouldn't be enough for it to repay its creditors by next April. Along with investment banks Moelis and Co. and Houlihan Lokey, MGM is exploring a number of options to get on more solid financial footing.